The United Nations on Wednesday announced its highest level of emergency for the humanitarian crisis in Iraq, where hundreds of thousands have been driven from their homes and tens of thousands had been trapped on a desert mountain by the advance of Islamic militants across the north of the country.

But after a U.S. Army Special Forces team was flown atop Sinjar Mountain to assess the situation Wednesday, Defence Secretary Chuck Hagel told reporters that far fewer Yazidi refugees were stranded and it was far less likely the U.S. would undertake a rescue mission.

Hagel said airdrops of food and water had sustained the refugees and that airstrikes on Islamic State of Iraq and Syria group militants had allowed many to escape.

U.S. officials said only several thousand Iraqi refugees remained on Sinjar Mountain, and Hagel said they were in relatively good condition.

The UN's declaration of a "Level 3 Emergency" will trigger additional goods, funds and assets to respond to the needs of the displaced, said U.N. special representative Nickolay Mladenov, who pointed to the "scale and complexity of the current humanitarian catastrophe."

Since June, Iraq has been facing an onslaught by the Islamic State group and allied Sunni militants across much of the country's north and west. In recent weeks, the crisis has worsened as the militant fighters swept through new towns in the north, displacing members of the minority Christian and Yazidi religious communities, and threatening the neighbouring Iraqi Kurdish autonomy zone.

Tens of thousands of Yazidis fled the advance to take refuge in the remote desert Sinjar mountain range. The U.S. and Iraqi military have dropped food and water supplies, and in recent days Kurds from neighbouring Syria battled to open a corridor to the mountain, allowing some 45,000 to escape.

The UN said it would provide increased support to those who have escaped Sinjar and to 400,000 other Iraqis who have fled since June to the Kurdish province of Dahuk. Others have fled to other parts of the Kurdish region or further south. A total of 1.5 million have been displaced by the fighting since the insurgents captured Iraq's second-largest city, Mosul, in June and quickly swept over other parts of the country.

The United States has been carrying out airstrikes in recent days against Islamic State fighters, helping fend back their advance on Kurdish regions. At the same time, Iraq's central government in Baghdad has been mired in political turmoil, after the president nominated a Shiite politician, Haider al-Abadi, to form the next government, putting him on track to replace embattled Prime Minister Nouri al-Maliki.

Al-Maliki on Wednesday said he will not relinquish power until a federal court rules on what he called a "constitutional violation" by President Fouad Massoum. "Holding on [to the premiership] is an ethical and patriotic duty to defend the rights of voters," al-Maliki said in his weekly address to the nation, insisting his actions were meant to "protect the state."

Al-Maliki has grown increasingly isolated, with Iraqi politicians and much of the international community lining up behind al-Abadi. Al-Abadi was picked to form a new government that can unite the country in the face of the Sunni militant onslaught, which many blame al-Maliki for fuelling by pro-Shiite policies that alienated the Sunni minority.

Widespread discontent with al-Maliki's rule has reached the point where both Saudi Arabia and Iran — regional rivals often bitterly divided over Iraq — have expressed support for al-Abadi. The United States, the European Union and the United Nations have also offered support for new leadership.

In Iran, Supreme Leader Ayatollah Ali Khamenei expressed hope Wednesday that "a government will be formed so that they [Iraqis] can give the necessary and appropriate response to the sedition-makers." Qatar's Ministry of Foreign Affairs said it hoped al-Abadi will establish "a comprehensive national government that includes all components of the Iraqi people."

The UN Security Council said Wednesday it was encouraged by President Massoum's decision to nominate a new prime minister-designate and urged al-Abadi to work swiftly to form "an inclusive government that represents all segments of the Iraqi population and that contributes to finding a viable and sustainable solution to the country's current challenges."

Tanks positioned in Baghdad

Iraqi troops imposed heightened security in Baghdad on Wednesday. Tanks and Humvees were positioned on Baghdad bridges and at major intersections, with security personnel more visible than usual as about 100 al-Maliki supporters rallied at Firdous Square.

At a meeting between al-Maliki and senior military commanders broadcast on state television Tuesday, the incumbent premier warned that security forces should not get involved in politics. He also raised the spectre of further unrest by saying Sunni militants or Shiite militiamen might don military uniforms and try to take control of the streets and "make things worse."

On Wednesday, attacks in and near Baghdad killed at least 29 people and wounded scores more, police said.

A car bomb in eastern New Baghdad killed eight while six people, including four police officers, died when a car bomb struck a checkpoint in western Baghdad. A bomb at a central market killed five people while two died in a bombing in the commercial Karrada district. A car bomb in the Baiyaa neighbourhood killed four and four more died in a mortar attack north of the capital.

Australia's Defence Minister David Johnston said his country's military would be sending two C-130 Hercules transport planes for humanitarian aid drops to begin within two or three days.

The European Union's 28 foreign ministers will hold an emergency meeting Friday on Iraq to co-ordinate their stance on military support for the Kurds and on providing humanitarian assistance for those fleeing the fighting, the EU said Wednesday.

The EU currently has an arms embargo on Iraq in place but it provides loopholes for equipment sold or transferred to the Iraqi military or international forces in Iraq. Sending arms directly to the Kurdish forces without going through Baghdad, however, could be seen as a violation of the embargo — thus the need for a decision by the EU ministers.

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